Consumer Proposals in Winnipeg

What you need to know and watch out for.

Consumer Proposal Winnipeg, Manitoba – Alternatives & Important Things You Need to Know

Name: Credit Counselling Society
Address: 611 - 428 Portage Avenue, Winnipeg, Manitoba, R3C 0E2
Telephone: 204-942-8789
Rating: 5

What is a consumer proposal, and is it the best option for me?

Filing a Consumer Proposal in Winnipeg is a debt repayment option that allows some people to consolidate their debts. It is a legal process between you and your creditors to repay a portion of what you owe, and it is governed by the Bankruptcy and Insolvency Act. To a large extent, the amount of debt you repay to your creditors is based on your income and what you own.

A Consumer Proposal can only be setup by a bankruptcy trustee and costs around $1,500. You’ll pay an initial setup fee, and if it is accepted by your creditors, you will pay the balance to proceed. In addition, the trustee will keep 20% of your future payments as your Consumer Proposal administration fee. For the proposal to be legally binding, the creditors who own the majority of your debt must agree to the arrangement. If they do, then you will be required to repay the agreed upon amount over a maximum term of 5 years.

Advantages and Disadvantages of Filing for a Consumer Proposal

Consumer Proposals contain certain advantages and disadvantages. These can include the following:

Advantages

It can significantly reduce the amount of debt you have to repay your creditors
It can be an effective method of debt consolidation in Winnipeg, Manitoba if:
- You can’t afford to repay all of what you owe
- You have stable income
- You have enough money in your budget to make monthly payments
It will pause active collection on student loan payments
Can be a good option if:
- You don’t qualify for a debt consolidation loan
- If you have debts (like high government debt) that can’t be included in a debt management program
It is one of the last ways to avoid bankruptcy

Disadvantages

It’s not a private matter. A Consumer Proposal is filed as a permanent public record and is included on a searchable database
It costs more than filing for bankruptcy
The Court must approve it
Creditors can choose to reject the proposal. If they do, you may need to offer them additional funds to convince them to proceed
You might need to sell some of your assets (such as a vehicle, your home, or investments)
You may need to file for bankruptcy if you miss more than 2 payments
Secured debts cannot be put into a proposal
Student loans less than 7 years old can’t be included
It can put certain professional licenses at risk, and the permanent record of your insolvency may also affect some future employment opportunities

It’s Okay to Ask for Help with Debt

“Life just happened. My debt got to the point where I started to feel like I was drowning. I didn’t feel like I could fix it on my own, and I wanted to start living my life as an adult without debt. I decided to reach out for help. Feeling relieved, I knew that everything was going to be okay – a lot of work – but okay. I had a plan to pay back my debt and continue doing the things I love to do like yoga and travelling.”

– Yasmine, Actual Client

Beware of the Big Debt Rip-Off

Consumer Proposals have become the latest method for a growing number of for-profit companies and their sales people to take advantage of vulnerable, unsuspecting consumers. Don’t let this happen to you! Many debt relief companies are now claiming to offer Consumer Proposals as an easy way to get out of debt. There’s a problem. Only a licensed bankruptcy trustee is allowed to file paperwork for a Consumer Proposal. The debt relief companies charge thousands in fees only to refer you to a bankruptcy trustee who then charges his or her own fees.

How to Prevent Getting Ripped Off

Follow the tips outlined below, but start by speaking to a member of Credit Counselling Canada (a national association of non-profit credit counselling organizations who don’t work on commission). If a Consumer Proposal is a truly good option for you, one of their agencies will inform you and refer you to a reputable bankruptcy trustee for free.

Talk with a Non-Profit Credit Counsellor

Talk to a non-profit Credit Counsellor about your situation first. They’ll review your whole financial picture with you and help you look into and understand all of your options to resolve your debt problems and get your finances back on track.

Only Pay a Trustee for a Consumer Proposal

Never hand over money to anyone for Consumer Proposal services except a government licensed bankruptcy trustee. The law states that only they are allowed to offer and get paid for these services.

Be Careful with Commission Based Debt Consultants

Find out how the person helping you is compensated. A lot of people who want to advise you on your debts work on commission. Make certain that the “solution” they are recommending is in your best interest – not theirs.

Find Out What Options May Be Available to You
by Answering 9 Simple Questions

Just answer these easy, multiple-choice questions to get a look at your potential options. Within a few minutes, you'll be looking at summarized options and results that apply specifically to your situation.

Discover Your Options

1. How would you describe your financial situation? Please move the slider along the scale to reflect approximately where you feel you're at.

I can cover all my expenses each month, plus have the ability to save.

I can cover my monthly expenses, but I need to borrow, work extra, etc.

I can no longer cover all my expenses every month.

2. Which of the following best describes you?

I pay off my balances in full each month I carry a balance but my debts are in “good standing” I carry a balance and I am behind in my regular payments I am receiving collection calls, letters, or threats to repossess assets I have been sued by one or more creditors

3. How stressed do you feel about your debt?

Not stressed

Somewhat stressed

Very stressed

4. Do you have any of the following significant assets? (Check all that apply)

Vehicle(s) Property Investments

5. Do you have any of the following secured debts? (Check all that apply)

Mortgage Vehicle Loan Line of Credit (Secured) Loan (Secured)

6. Do you have any of the following unsecured debts? (Check all that apply)

Credit Card Line of Credit (Unsecured) Payday Loan Overdraft (Unsecured) Outstanding balance with a service provider (phone/internet, utilities, gyms, etc.)

7. Do you have any of the following government debts? (Check all that apply)

Canada Revenue Agency (CRA) Debt Student Loan

8. What have you done up to this point for your debt? (Check all that apply)

I have contacted a bank or credit union for help. I have contacted a financial professional. I have discussed my situation with friends or family. I'm not sure where to start. I have done some research but need help understanding things. I don’t have any income to work with.

9. What province or territory do you live in?

Calculations - Hidden from Users

General Numbers: Income: $ People in Household: Housing Expenses: $ Food Expenses: $ Transportation: $ Medical Expenses: $ Support Payments: $ Home Value: $ Mortgage Balance: $ Other Assets: $ Government Debt Amount: $ Secured Debt Amount: $ Unsecured Debt Amount: $ Debt Payments: $ Debt Payments as % of Income: %

Debt Relief Numbers: Needs Help?: Assets can pay off consumer debt?: DMP Qualifier Redline (Debt to Income Level): % (Line at 23%) Debt Amount > Min: '' (5K+ Ideal, 3K Min) Income: $ - Survival Expenses: $ Income - Survival Expenses: $ Minimum DMP Payment: $ Can afford a DMP: Qualifies for DMP: Consumer Proposal: Debt over $5,000?: Lowest CP Payment Est.: $ Enough income for CP payments? : , $ Bkrpt Exemption Amount: $ Amount over(+)/under(-) guideline: $ Over $200 above guideline?: Qualifies for CP: Insolvency Insolvent?:

How Your Credit Will Be Impacted by a Consumer Proposal

Once you enter into a Consumer Proposal, a special notation is placed on your credit report in the public records section. Anyone who you allow to look at your credit report can see the public records section.

Additionally, it is possible that your creditors will report a “7” rating on any debt included in the proposal. This “7” rating means that creditors are receiving your payments through a third party. In this instance the third party would be your trustee. When you send a payment to your trustee, they distribute the agreed upon dollar amounts to all of your creditors once all applicable fees have been paid.

If you are making payments to secured creditors, like for a car loan, outside of your Consumer Proposal, those creditors will report on those debts separately. Creating and sticking to a realistic budget will make this easier.

If you are able to maintain a good payment history on a secured debt while you’re making your proposal payments, this can help you re-build credit afterwards.

Contact Us for More Information About Filing for a Consumer Proposal in Winnipeg, Manitoba

There are quite a number of options between financial difficulty and bankruptcy. A Consumer Proposal might be one good option for some people, but it’s not the best option for everyone. To find out what other options you have, speak with one of our professionally trained Credit Counsellors today, in person or over the phone. Our appointments are free, non-judgmental, and completely confidential.

To ask us some questions or to make an appointment to speak with a Counsellor, phone us in Winnipeg at 204-942-8789. You can also email or chat with us online right now.

Winnipeg Office: 201 Portage Avenue, 18th floor, Winnipeg, MB R3B 3K6

Phone: 204-942-8789

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Consumer Proposal Winnipeg, Manitoba – Alternatives & Important Things You Need to Know